President-elect Donald Trump lashed out at Boeing on Twitter this week for charging way too much for the company’s new version of his new airplane, Air Force One. “More than $4 billion,” he tweeted earlier in the week. “Cancel order!” Later he told reporters that the cost for the two new planes that will replace the current version “is totally out of control.” He added, “I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money, but not that much money.”
Maybe Trump woke up on the wrong side of the bed and Boeing was the first thing that crossed his mind. Even if he does cancel the contract, Air Force One is only a small part of the $96.11 billion in sales that the Chicago-based Boeing racked up in 2015.
A much more serious concern for Boeing is the $25 billion the company stands to rake in from the Iran Deal—which Trump also apparently believes to be a rip-off. The ostensibly patriotic airplane company was last in the news for rolling out its mega-deal with the Iranians. The deal, some argued, was was likely to assist the Iranian regime in its bloody war in Syria, where the IRGC has frequently landed passenger jets to deliver weapons and troops.
Boeing was heavily invested in selling the Iran nuclear deal, paying a lobbying firm to “monitor” it, even as the American aerospace giant denied that it had any position on the agreement, and even as it employed one of the most vocal proponents of the JCPOA and a longtime advocate of engagement with Iran, former U.S. ambassador Thomas Pickering, who presented himself to Congress and in the press as an impartial arbiter of the deal’s merits. “I was a Boeing employee from 1/2001 to 6/2006,” Pickering told The Daily Beast. “I was a direct consultant to Boeing from 7/2006 until 12/2015 when contract for consulting was moved to [private Washington firm Carla Hills and Co.] for my work.”
Pickering was so confident of his work that when asked about congressional opposition to the Boeing contract he told his interlocutor bluntly that “nobody has blocked the deal. It’s all the done.”
Not exactly. Nearly 6 months after the contract was announced, full financing for the deal has yet to be finalized. It now seems that in spite of the Obama Administration’s efforts to see Boeing’s big business deal completed before the 44th president leaves office, there will be no financing before January 20 due to the fear, uncertainty, and doubt about doing business with Iran under Donald Trump.
Once Trump takes office, the guidelines published by the Treasury Department’s Office of Foreign Asset Control are likely to be rewritten. It is almost certain that the Frequently Asked Questions, as they are known, regarding issues like which Iranian businesses are legally “controlled” by the Islamic Revolutionary Guard Corps, will be revised. As the Treasury is revising and clarifying the FAQs, investment in Iran will go into deep freeze.
How long will it take to write new FAQs? Who knows? Maybe a long time.
Another big concern right now for potential investors, and others, is the increasing likelihood that the Trump administration will make public documents related to the Iran Deal that the Obama White House concealed from the American public. No one wants to be caught out if the lights come on. As Mark Dubowitz, an Iran sanctions expert and executive director at the Foundation for the Defense of Democracies told me: “The growing push to expose the details of the administration’s midnight deals on behalf of Iran has put a chill in business like the Boeing deal. Banks might have been willing to do the Obama administration those kinds of favors if they’re confident they’ll remain anonymous. But they’re much more reluctant to finance deals for the world’s top state sponsor of terrorism if they know they could be named and potentially shamed or worse.”
So, maybe Trump was just lashing out at Boeing erratically on the subject of Air Force One—but executives and stockholders in the company would be wise to gauge the elevated levels of risk suggested by Trump’s tweet-storm: We want American companies to make a lot of money, but not at the expense of American national security.